A recent whitepaper was published by Consensys called "Central banks and the future of digital money" serving as a proposal to central banks around the globe.
What was the key take away message in this whitepaper? That central banks looking into creating their own cryptocurrencies (known as CBDCs or Central Bank Digital Currencies) should build on Ethereum. But, can Consensys really talk them into it?
Before you get too excited, Consensys is not suggesting that central banks build on the open blockchain Ethereum, but rather make a permissioned, private blockchain ran and controlled by the central banks themselves.
I know what you are thinking, How can that help Ethereum benefit? Actually, you might be surprised how much it can help. Inside the whitepaper the Consensys team sets out to be informative to those considering the idea of doing a CBDC, but they also add that CBDCs would have the convenience of easy interoperability with the Ethereum mainnet.
Why would the CBDCs want interoperability with Ethereum? The Ethereum blockchain can be useful for trustless and distributed CBDC-to-CBDC interactions. Okay, maybe that is SOME additional activity that could find its way to Ethereum mainnet, but would it be that great of a deal for Ethereum? Well, let's think about another aspect of such an event, if the Ethereum blockchain becomes the blockchain used by all or most of the CBDCs it can cement Ethereum's role as the #1 blockchain for developers, bringing in even more developers than ever before, and the standard tech for the future of finance.
I'm not sure how much I like the idea of CBDCs entering the blockchain industry, but one thing is for sure, if the majority of CBDCs build on Ethereum it can only grow the network effect of the #2 blockchain.
Want to read the whitepaper for yourself? Check it out here: